Power Shift – empowering vulnerable households

Contributed to On The Wire by Kerry Connors, Associate Director, Research at Energy Consumers Australia

The big jump in energy prices in the last twelve months has highlighted the fundamental imbalance that exists between the consumers and energy companies in the energy market.

While prices might fluctuate, households’ ability to manage their consumption, to find alternatives, is very limited.

Renters living in poorly insulated properties, those without the money to install solar panels, those who can’t move to cheaper offers will have had little choice but to find the extra money to pay the bigger bills.

Some households may have had to make the tough decision to ration their energy to meet budget limits to the detriment of a comfortable home and their health and wellbeing.

Drawing on the Commonwealth Government’s $73 million Low Income Energy Efficiency Program (LIEEP), Energy Consumers Australia’s Power Shift project is searching for ways to empower and expand the options for these households.

Finding what works – trawling through LIEEP

LIEEP trialled a range of different ways to help vulnerable consumers manage their energy use in 20 pilots – from home energy visits and training in the home and through a local community groups, to property retrofits, and cutting edge digital tools.

We recently published a review of those projects – Driving Change: Identifying what caused low-income consumers to change behaviour (GEER) – that found that most pilots reported reduced average daily household use of between 2-12%.

Home energy visits along with major property retrofits emerged as one of the more effective approaches. The pilots that relied on consumer and community education were more mixed, although they did yield important lessons about how to adapt outreach for different consumer groups.

The pilots that used digital technology and social media to engage with consumers delivered impressive results. Reduce Your Juice – an online game developed for young renters – reported reductions of around 11%. Not only did these pilots deliver meaningful energy reductions, but they showed a potential to be scaled-up at low cost.

The consistent finding across all the projects was that consumers want to take control, but need the right information and tools for them.

Tools for decision-makers in industry and government

The LIEEP evidence base also underlines that energy is critical to health and wellbeing – we have known that living at unsafe temperatures leads to a range of health issues, but it’s also much clearer how it relates to social and economic exclusion. Some participants in the LIEEP pilots were reluctant to invite friends and family into cold and uncomfortable homes. Without energy, people are unable to study or seek employment – a big cost to the individuals but also the community and the economy.

We commissioned ACIL Allen to develop a framework that could be used by Australian policy-makers and industry to quantify and define those benefits. The framework, available on the Power Shiftwebpage, details the range of household, sectoral and macroeconomic impacts of consumers using energy more effectively. This tool will make it easier for policy-makers to build business cases, measure the impact of energy efficiency programs, and improve them over time.

Power Shift in 2018/19

We will shortly be commissioning new research to map the ways consumers make energy decisions and identify ways to offer timely, effective support. We have also commissioned The Brattle Group to identify any structural barriers that are standing in the way of innovation and new energy management products and services.

It is clear that no amount of information or education can help when a house or major appliances are inefficient – and we are also considering ways to lift housing standards.